It is the investment manager for the mutual fund. It is a company set up primarily
for managing the investment of mutual funds and makes investment decisions in accordance
with the scheme objectives, deed of Trust and other provisions of the Investment
Management Agreement.

Average Maturity

The average of all maturity dates for securities in a money market or bond fund.
The longer the average maturity, the more volatile a fund's share price will be,
moving up or down as interest rates change.

Barter

The exchange of goods and services for other goods and services without the use
of money.

Balanced Funds

A class of mutual fund that aims at allocating the total assets with it in the portfolio
mix of debt as well as equity instruments.

Balance Sheet

A financial statement showing the nature and amount of a company's assets, liabilities
and shareholders' equity

Bear Market

Period during which investors are on a selling spree and the share prices are going
down.

Benchmark

A parameter with which a scheme can be compared. For example, the performance of
a scheme can be benchmarked against an appropriate index.

Beta

It is the measure of the relative sensitivity of a stock or mutual fund to the market.
The market is assigned a beta of 1. The higher the beta, the more sensitive the
stock or fund is considered to be relative to the market as a whole. In other words,
funds with beta more than 1 will react more to any fluctuations (whether upward
or downward) in market than funds with beta less than 1.

Bond

A debt instrument issued by a company, state or the central government (or its agencies),
with a promise to pay interest at regular intervals and return the principal on
a specified date.

Bond Rating

System of evaluating the probability of whether a bond issuer will default. CRISIL,
ICRA, CARE and other rating agencies analyze the financial stability of both corporate
and state government debt issuers.

Board of Directors

A committee elected by the shareholders of a company, empowered to act on their
behalf in the management of company affairs. Directors are normally elected each
year at the annual meeting.

The fee payable to a broker for acting as an intermediary in a transaction. For
example, brokerage is payable by a fund for getting fresh investments from investors.

BSE Index

A index reflecting the stock prices of 30 companies listed on the Bombay Stock Exchange
(BSE) which is taken to be representative of the stock market movement.

Bull Market

A market that has been gaining value over a prolonged period.

Capital

This is the amount of money you have invested. When your investing objective is
capital preservation, your priority is trying not to lose any money. When your investing
objective is capital growth, your priority is trying to make your initial investment
grow in value.

Capital Appreciation

As the value of the securities in a portfolio increases, a fund's Net Asset Value
(NAV) increases, meaning that the value of your investment rises. If you sell units
at a higher price than you paid for them, you make a profit, or capital gain. If
you sell units at a lower price than you paid for them, you'll have a capital loss.

Capital Gains

The difference between assets purchased price and selling price, when the difference
is positive. A capital loss would be when the difference between an asset's purchase
price and selling price is negative.

This is extra security provided by a borrower to back up his/her intention to repay
a loan.

Closed-End Mutual Fund

A mutual fund that has a fixed number of shares and is typically listed on a major
stock exchange. These funds often trade perpetually at a discount to their net asset
value (NAV).

Commercial Paper

Short-term, unsecured promissory notes with maturities shorter than 3 months. They
are issued by corporations to fund short-term credit needs.

Commission

The broker's or agent's fee for buying or selling securities for a client. The fee
is usually based on a percentage of the transaction's market value.

Compliance Officer

He is the officer appointed by the AMC to comply with various regulatory requirements
and to redress investor grievances associated with the funds.

Compounding

When you deposit money in a bank, it earns interest. When that interest also begins
to earn interest, the result is compound interest. Compounding occurs if bond income
or dividends from stocks or mutual funds are reinvested. Because of compounding,
money has the potential to grow much faster.

Consumer Price Index (CPI)

An inflation tracker, much followed by the mainstream media. It is the measure of
the price change in consumer goods and services

Corpus

The total amount of money invested by all the investors in a scheme.

Coupon

The term is used colloquially to refer to a security's interest rate

Coupon Rate

The annual rate of interest payable on a debt security expressed as a percentage
of the principal amount.

Custodian

The bank or trust company that maintains a mutual fund's assets, including its portfolio
of securities or some record of them. Provides safekeeping of securities but has
no role in portfolio management

Cut - Off Time

In respect of all mutual funds regulated by SEBI, fresh subscriptions and redemptions
are processed at a particular NAV. Every fund specifies a cut-off time in respect
of fresh subscriptions and redemption of units. All requests received before are
processed at that day's NAV and thereafter at the next day's NAV.

Debt / Income Funds

Funds that invest in income bearing instruments such as corporate debentures, PSU
bonds, gilts, treasury bills, certificates of deposit and commercial papers. Although
these funds are less volatile, the underlying investments carry a credit risk. Comparatively,
these funds are the least risky and are preferred by risk-averse investors.

Deficit

The shortfall between government revenues and budgetary spending in any given year.
A surplus occurs when annual revenues exceed expenditures.

Debenture

A debt obligation that is not backed by collateral, but usually rated by a credit
rating agency.

Derivative

A financial contract whose value is "derived" from another underlying asset, such
as stocks, bonds, commodities, or a market index such as NSE 50. The most common
types of derivatives are options, futures, and mortgage-backed securities.

Discount

The difference between the lower prices paid for a security and the security's face
amount at issue.

Diversification

Investing in separate asset classes (stocks, bonds, and cash) and/or stocks of different
companies in an attempt to lower overall investment risk.

Dividends

Mutual fund dividends are paid out of income from the scheme's investments and can
be announced out of the realized gains only. While dividends in the hands of the
investor are free from tax, mutual funds are now required to pay a "distribution
tax" for dividends declared from debt-oriented schemes.

Dividend Frequency

The periodicity of dividend payout of a scheme. This is especially valid in the
case of an income/debt scheme.

Dividend Per Unit

Total amount of dividend declared by a fund for a scheme divided by total number
of units issued to all the investors.

Dividend Period

The period for which the dividend is declared

Dividend Plan

In a dividend plan, the fund pays dividend from time to time as and when the dividend
is declared.

Dividend Reinvestment

In a dividend reinvestment plan, the dividend is reinvested in the scheme itself.
Hence instead of receiving dividend, the unit holders receive units. Thus the number
of units allotted under the dividend reinvestment plan would be the dividend declared
divided by the ex-dividend NAV.

Dividend Warrant

Instrument issued by companies/ mutual funds to an investor for the purpose of payment
of dividends

Dividend Yield

The dividend earned per unit of a scheme at the prevailing per unit price.

Entry Load

It is the load charged by the fund when one invests into the fund. It increases
the price of the units to more than the NAV and is expressed as a percentage of
NAV.

Equity Linked Savings Scheme

A special product offered by mutual funds. These schemes invest in equity i.e shares
and generally have a lock-in period of three years. The basic features of ELSS schemes
are: Tax rebate of 20% under section 88 of the Income Tax Act on an (maximum) investment
of Rs.10,000/-

Equity Schemes

Schemes where more than 50% of the investments are done in equity shares of various
companies.

Endorsement

A legal term that refers to the signing of a document which allows for the legal
transfer of a negotiable from one party to another.

Exchange Privilege

The opportunity given to a mutual-fund shareholder to exchange a fund for another
within the same fund family at no additional cost.

Earnings per Share (EPS)

The portion of a company's profit allocated to each outstanding share of common
stock. EPS serves as an indicator of a company's profitability. Calculated as:

Equities

Shares of stock in a company. Because they represent a proportional share in the
business, they are "equitable claims" on the business itself

Expense Ratio

The percentage of a mutual fund that is taken out of the pockets of shareholders
to pay. If you are investing in mutual funds, look for funds with a low expense
ratio.

Fiscal Year

The percentage of a mutual fund that is taken out of the pockets of shareholders
to pay. If you are investing in mutual funds, look for funds with a low expense
ratio.

Gilt Funds

A mutual fund that invests in several different types of medium and long-term government
securities in addition to top quality corporate debt. Gilts originated in Britain.

Growth Funds

A diversified portfolio of stocks that has capital appreciation as its primary goal,
and thereby invests in companies that reinvest their earnings into expansion, acquisitions.

Income Fund

A mutual fund that seeks to provide stable current income by investing in securities
that pays interest or dividends

Index Fund

A portfolio of investments that is weighted the same as a stock-exchange index in
order to mirror its performance.
This process is also referred to as "indexing".

Initial Public Offering (IPO)

The first sale of stock by a private company to the public. IPO's are often issued
by smaller, younger companies seeking capital to expand, but can also be done by
large privately-owned companies looking to become publicly traded.
In an IPO, the issuer obtains the assistance of an underwriting firm, which helps
it determine what type of security to issue (common or preferred), best offering
price and time to bring it to market. Also referred to as a "public offering".

Any location, as may be defined by the Asset Management Company from time to time,
where investors can tender the request for subscription, redemption, switching of
units, or any other request.

Liabilities

Plural of liability. A liability is a financial obligation, debt, claim, or potential
loss.

Liquidity

The degree to which an asset or security can be bought or sold in the market without
affecting the asset's price. Liquidity is characterized by a high level of trading
activity.

Load

A sales commission paid when purchasing shares of a mutual fund (called as entry
load) or when redeeming shares of a mutual fund (called as exit load).

Most mutual funds today carry some load, since costs are incurred in the operation
of the fund and as a result of numerous shareholder transactions (i.e. buying and
redeeming of mutual fund shares). Also, this load quite literally acts as a burden
for investors, effectively discouraging them from trading the mutual fund short-term.

Money Market Fund

Mutual fund that invests typically in short-term government instruments (treasury
bills) and commercial paper (CPs) and Certificates of Deposit (CDs). These funds
tend to be lower-yielding, but less risky than most other types of funds.

Net Asset Value

The worth, in market terms, for each unit of the fund. It is calculated as the market
value of all investments in the fund less liabilities and expenses divided by the
outstanding number of units in the fund. Most schemes announce their NAV s on a
daily basis.

Net Worth

The amount by which a person's assets exceed their liabilities.

Open-End Fund

A mutual fund that has an unlimited number of shares available for purchase. Most
mutual funds are open-ended.

Operating Expenses

The cost of doing business. Operating expenses are deducted from revenues, and the
result is, hopefully, profits

Option

A call option is a contract in which a seller gives a buyer the right, but not the
obligation, to buy the optioned shares of a company at a set price (the strike price)
for a certain period of time. If the stock fails to exceed the strike price before
the expiration date, the option expires worthless. A put option is a contract that
gives the buyer the right, but not the obligation, to sell the stock underlying
the contract at a predetermined price (the strike price). The seller (or writer)
of the put option is obligated to buy the stock at the strike price.

Portfolio

All the securities held by an individual, institution, or mutual fund

Preferred Stock

Preferred stock pays a dividend on a regular schedule and is given preference over
common stock in regard to the payment of dividends or -- heaven forbid -- any liquidation
of the company. Their share prices tend to remain stable, and will generally not
carry the voting rights that common stock does.

Premium

The difference between the higher price paid for a security and the security's face
amount at issue.

Price-To-Earnings Ratio (P/E)

The share price of a stock, divided by its per-share earnings over the past year

Rate of Return

The difference between the price paid for a security and the security's sale price
including any cash distribution expressed as a percentage

Record Date

The date on which a company's books are closed in order to identify share owners
and distribute quarterly dividends, proxies, or other financial documentation

Risk Tolerance

The measurement of an investor's willingness to suffer a decline (or repeated declines)
in the value of investments while waiting and hoping for them to increase in value.
Generally investors are risk averse

Rupee Cost Averaging

Strategy of making regular investments into a mutual fund and having earnings automatically
reinvested. This way, when the share price drops, more shares are bought at lower
prices.

Sector Fund

A mutual fund that invests its shareholders' money in a relatively narrow market
sector, e.g., technology, energy, the Internet, or banking

Securities

A fancy name for shares of stock, bonds, or any kind of financial asset that can
be traded.

Spread

The difference between the bid and ask price, i.e., the highest price offered and
the lowest priced asked for a security.

Time Value of Money (TVM)

The basic principle that money can earn interest, and so something that is worth
Rs. 1 today will be worth more in the future if invested. This is also referred
to as future value

Total Return

The rate of return on an investment, including reinvestment of distributions

Tracking Error

A divergence between the price behavior of a position or portfolio and the price
behavior of a benchmark

Trustee

An individual who holds or manages assets for the benefit of another.

Volatility

The degree of movement in the price of a stock or other security

Yield

Interest or market earnings on a bond or a fixed-income instrument

Yield Curve

A line plotted on a graph that depicts the yields of bonds of varying maturities,
from short-term to long-term. The line, or "curve," shows the relationship between
short- and long-term interest rates

Zero-Coupon Bond

These bonds are so named because the coupon rate (the amount of interest paid) is
zero. Rather than paying interest on a periodic basis, these bonds are issued at
a fraction of their par value and increase in value as they approach maturity (e.g.,
U.S. savings bonds). Also known as an accrual bond.